President Obama is pushing to raise the minimum wage to $10.10 per hour.
Interesting play
$10.10 … not $10.
Why?
To make folks think that he thought about it … that $10.10 is some kind of magical optimum.
Putting that silliness aside, the rationale is well-intended: get low-earners closer to a “living wage”
The major argument against the move is econ 101 … and empirical evidence.
The below chart – from AEI’s Mark Perry — cuts to the chase.
The chart plots the level of the Federal minimum wage against the number of percentage points that the teenage unemployment rate is over the all-inclusive unemployment rate.
Implicitly, the analysis assumes that the bulk of minimum wage jobs go to teens … and, measuring the differential (instead of the gross rate) normalizes to the overall state of the economy.
The conclusion is stark: when you raise the minimum wage you lose jobs.
Period.
But, some folks argue that economic life is better for the minimum wagers who retain their jobs.
Not so fast …
The Homa Files 